Lawsuit: Kotek ally leaked bourbon report to justify director firing

Oregon Governor Tina Kotek fired OLCC director Steve Marks soon after taking office in 2023, satisfying a goal of her political allies, including La Mota

Oregon Governor Tina Kotek plays pickleball with La Mota co-founder Aaron Mitchell at a fundraising event for Kotek’s 2022 campaign.

Earlier this month Slobodan Subasic, the former Chief Information Officer of the Oregon Liquor and Cannabis Commission (“OLCC”), alleged in a $6 million lawsuit against his former employer that a close advisor and political ally of Governor Tina Kotek intentionally leaked the OLCC’s internal investigation into Subasic and other managers to the media to justify Kotek’s decision to terminate OLCC director Steve Marks at the request of her campaign donors and political supporters, including disgraced cannabis firm La Mota.

Last week, Portland Dissent’s Richard Cheverton broke the story about the Subasic lawsuit. Today, I want to focus on one part of the complaint, which goes to the mystery of why Kotek fired Marks and how the bourbon scandal, which had laid largely dormant within the OLCC for months, caught the world’s attention.

To get there, we need a little context.

The scandal that erupted in the wake of The Oregonian’s first reporting on OLCC employees’ practice of buying rare bourbon that is difficult for the public to obtain last year sparked, as is required of all political scandals for the past 50 years, a name alluding to Watergate: “Bourbongate.”

As Bourbongate unfolded in early February 2023, newly sworn in Governor Tina Kotek was eager to hold to account those she said were responsible for Bourbongate, writing in a letter dated February 8 that she “will not tolerate wrongful* violations of our government ethics laws,” and demanding the OLCC governing body “install new leadership and remove the managers and executive leadership who have taken advantage of their access and authority to benefit themselves.”

The OLCC terminated five employees, including Subasic, at the Governor’s request. OLCC director Steve Marks resigned, though Kotek was careful to stipulate in her February 8 letter that she had asked for Marks’ resignation before learning of Bourbongate. The Governor requested, and received, the resignation of former OLCC chair Paul Rosenbaum, appointing longtime commissioner Marvin Révoal to replace him.

Parts of the Kotek-fostered and publicly understood timeline have never made sense to some, including me. For example, the OLCC’s own internal investigation into Bourbongate occurred in 2022, long before it became public knowledge. The implicated employees, who maintain that requesting rare bottles of bourbon was a common practice for decades, were reprimanded. Then, in late January 2023, Bourbongate suddenly took on new urgency.

Subasic’s complaint (read the whole thing yourself here) offers an explanation for why Bourbongate caught fire when it did. To be clear, these are allegations in a former employee’s complaint, and have not been proven in a court of law.

To set things up, the complaint alleges the reasons why Kotek may have wanted to get rid of Marks before she even took office:

It was widely known that Marks and Kotek had a long-standing rocky relationship, and that he considered her not a good fit for the OLCC. Further, there was outside political pressure from various interest groups to reform or eliminate the agency. Many of these interest groups, including La Mota and Mike Marshall, had endorsed and financially contributed to Kotek’s campaign.

La Mota is, of course, the disgraced cannabis company that gave literal paper bags filled with cash to a host of Oregon Democrats, including Kotek to the tune of around $75,000, in the run-up to the 2022 election. La Mota wanted Marks gone because its founders believed he was too tough on the cannabis industry. Kotek later donated the same amount as her La Mota contribution to her former employer, Oregon Food Bank.

Marshall runs Recover Oregon, a Portland nonprofit that advocates for policies discouraging the consumption of alcohol. Marshall believed Marks was too enthusiastic about the OLCC’s mission to sell liquor and not sufficiently committed to its other mission to regulate liquor. Marshall eventually said he convinced Kotek to fire Marks, having bent her ear at an October 2022 fundraiser and again in December, after Kotek had won the governorship.

Subasic further alleges that three days after Kotek’s inauguration, a human resources director for the OLCC summoned him to a meeting in which Subasic, who had been interviewed long before for the agency’s internal Bourbongate investigation, was informed the matter had been concluded.

Then, according to the complaint, on January 31, OLCC investigators presented their findings, including a finding that Subasic and the other implicated managers had violated Oregon ethics laws, to Berri Leslie, the executive director of the Department of Administrative Services, which helps state agencies with human resources matters.

But Leslie is not the only DAS official who received the findings contained in the internal investigation documents, according to the complaint:

Based on information and belief, Deputy Chief Human Resources Officer Brian Light (“Light”) was also provided the HR investigation. Light had worked in the DAS’s Office of the Chief Human Resources Officer (“CHRO”) since 2019. He was the DAS’s Liaison to the OLCC, a position he had held for some time.

And then this firebomb of an allegation:

Based on information and belief, Berri Leslie, and Light, along with the DAS were focused on fulfilling the wishes of Kotek and the Governor’s Office to remove Marks in a way that produced a media sound bite that they could use to quell outside political pressure; this included showing Kotek was holding and [sic] agency head accountable and forcing a political enemy, Marks, to leave in disgrace. Kotek’s agenda also satisfied her political donors who wanted to change the OLCC. The violations of Plaintiff’s constitutional rights, intrusion on his right of privacy, and irreparable damage to his health and reputation were collateral damage to Defendants’ agenda.

Based on information and belief, Light, a political supporter and financial contributor to Kotek’s campaign for governor, released the HR investigation information to the media without Plaintiff’s knowledge or consent. Light’s actions resulted in media inquiries to the DAS  including from The Oregonian newspaper reporter Noelle Crombie[.]

Berri Leslie and the DAS either knowingly encouraged Light to release this information to the media or recklessly disregarded the risk that Light may take such action given Light’s history at the Department of Consumer and Business Services as its HR Director. It was public knowledge at the DAS that Light was a civil defendant in a federal civil rights suit where he was accused of similar conduct.

(All emphasis added).

Let’s first address this “on information and belief” business. It means the plaintiff has been told something and believes it. Lawyers use the term in complaints to signal that the allegation that follows it might be based on hearsay, which may not be admissible at trial. Often, that evidence is presented at trial in a manner that avoids the hearsay problem, for example by calling the witness who told the plaintiff.

Light is a longtime employee of the State of Oregon. According to the Oregon Secretary of State’s campaign finance database, Light has donated a couple hundred dollars to the campaigns of Kotek and former Governor Kate Brown in recent years.

I emailed both Light and Berri Leslie to ask them to confirm or deny Subasic’s allegations about the OLCC report leak. I received an email in response from a communications director with the agency saying the agency cannot comment on pending litigation.

Subasic’s allegations are not the first indication that Kotek’s official version of the demise of Marks and Bourbongate is incomplete.

Since the initial furor of Bourbongate died down last year, new details have pick-a-verb-other-than-emerged-for-the-love-of-God indicating Kotek’s ethics crusade was perhaps not as even-handed as she would like us to believe. The Oregon Roundup broke the story that OLCC commissioner Matt Melatis had requested a bottle of rare bourbon from OLCC officials (Maletis says he did not receive the bottle). Melatis, a Kotek donor, remains on the commission.

More recently, The Oregonian reported that Révoal himself had requested a case of rare bourbon. Kotek did not publicly demand his resignation, but Révoal did resign about a month later. Kotek later issued a glowing letter of appreciation to Révoal, thanking him for “guiding the OLCC through some of the most challenging moments in its history.”

An attorney for Marks himself has filed with the state a notice that Marks intends to sue the OLCC for his firing as well, suggesting in the notice that “Marks was summarily forced out of office by Gov. Tina Kotek in early 2023 because Rosa Cazares, prominent owner of one of Oregon’s largest dispensary chains and an opponent of cannabis regulations, wanted him gone.”

Federal prosecutors are investigating La Mota’s efforts to steer state cannabis policy with campaign donations to Oregon Democrats and by giving former Secretary of State Shemia Fagan a $10,000-per-month consulting role while her agency was completing an audit critical of the OLCC’s cannabis regulations developed under Marks.

According to Willamette Week, the federal probe recently expanded to include U.S. Representative Val Hoyle, who while Oregon’s Labor Commissioner, pushed through the agency a $500,000 grant to a nonprofit recently co-founded by Cazares while receiving campaign donations from Cazares and fellow La Mota boss Aaron Mitchell.

The grant, putatively for training cannabis workers, was deemed unlawful by Hoyle’s labor commissioner successor after most of it had been issued to the nonprofit. Cannabis remains a controlled substance under federal law, and federal grants cannot be used to support cannabis cultivation.

The federal probe has been ongoing for most of the past year. Its full scope, and whether it includes La Mota’s relationship with Kotek and any role in the firing of Marks, remains uncertain.

*The Governor did not say whether she would tolerate what she considers rightful violations of our government ethics laws.